Gatehouse Media, LLC

About Gatehouse Media, LLC

GateHouse Media lets the local news flow freely. The company is a leading community newspaper publisher with more than 400 publications. Its portfolio includes roughly 80 daily newspapers, along with many more weeklies and shoppers that reach about 10 million readers. GateHouse generates revenue primarily through advertising; its papers serve ads from almost 300,000 business advertisers. In conjunction with its print publications, the company operates more than 600 websites. GateHouse also produces a half dozen yellow page directories and it offers commercial printing services. Private equity firm Fortress Investment Group owns about 40% of the company, which emerged from prepackaged Chapter 11 bankruptcy in late 2013.

Geographic Reach

GateHouse operates newspapers and websites in about 20 states.

Operations

The company has three operating segments: advertising, circulations, and commercial printing. Advertising accounted for almost 70% of revenue in fiscal 2012.

Sales and Marketing

GateHouse itself reported total advertising expenses of $3.4 million in fiscal 2012.

Financial Performance

The company's revenue decreased 6% and its net loss increased 38% in fiscal 2012 compared with the previous year. The decrease in revenue was attributed to decreases in advertising revenue and circulation revenue partially offset by an increase in commercial printing and other revenue. GateHouse's net loss increased primarily due to the decrease in total revenue, not because of increased operating expenses.

Strategy

The downturn in the economy and the decline of the newspaper industry have forced the company to concentrate mostly on cutting costs, streamlining operations, and converting to a more multimedia company. The company has tried to improve the productivity of its labor force. GateHouse also relies on the loyalty of readers interested in local news, as about 85% of its newspapers have been around for more than 100 years.

Company Background

GateHouse was formed in 1997 as Liberty Group Publishing to buy about 160 publications from newspaper giant Hollinger International (later Sun-Times Media Group). It went public in 2006, changing its name in the process.